Citi says Q1 reports from the semiconductors were “better-than-feared” as most companies stated they experienced minimal tariff impacts. However, the firm continues to expect estimate cuts “across the board” over the summer, driven by a tariff-induced recession. Citi’s 2026 earnings estimates are 19% below consensus on average, the analyst tells investors in a research note. The firm points out that consensus estimates declined 13% on average during earnings season, driven by downside from Intel (INTC), On Semi (ON), and AMD (AMD). Citi’s top picks remain Analog Devices (ADI) and Texas Instruments (TXN) “given their defensive nature.” Even if a recession doesn’t materialize, both should benefit from inventory replenishment in the industrial end market along with a rapid increase in gross margins given low utilization rates, contends the analyst.
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